Urbanists have long prophesied the decline of suburban fringe development and a return to downtown as the nation becomes more populous, more diverse, and more carbon-conscious. A new report by the EPA suggests that this geographic shift is already well underway in many points on the map.
The study, which looked at residential building permits in the nation’s 50 most populous metro regions from 1990 to 2007, offers quantitative evidence that city neighborhoods are making a comeback. More than half of the markets in the study saw a dramatic shift away from exurban greenfield development and an uptick in urban core redevelopment over an 18-year period. In 15 of those markets, the central city more than doubled its share of housing permits, with the most accelerated spikes occurring in the past five years.
“We’ve had anecdotal evidence for a while about successful infill projects, but we were curious to see how they fit into the big picture,” says John Thomas, an EPA policy analyst and author of the report. “The big question was whether those examples added up to a fundamental shift in the geography of residential construction.”
In many parts of the country, the answer is a definitive yes. Inner city redevelopment now accounts for more than half of residential new construction in New York, for example, up from just 15% in the early 1990s. In Los Angeles, the number of housing permits issued for city lots jumped from 19% to 37% during that same time frame. That’s in the context of an analysis that teased out, by jurisdiction, the number of permits issued inside city limits versus those issued in the surrounding suburbs.
And the trend isn’t limited to the coasts. In Chicago, urban core redevelopment now accounts for 40% of all residential building permits in the region, up from 7% in the early 1990s.
Other cities in the study posting notable downtown growth spurts include Miami, Atlanta, Seattle, San Diego, Denver, Portland, Ore., Sacramento, and Milwaukee.
Many planning experts expect this reverse migration to continue as baby boomers and echo boomers--the largest demographic groups on the market--drive housing preferences. Additional factors weighing heavily on the shape and location of housing include increased immigration, smaller households, concerns over energy usage and climate change, and downsized consumer expectations in the wake of the current recession.
“Until recently, every house we were building was for the Waltons, even though traditional nuclear families represented only about 25 percent of the market,” says Ed McMahon, senior resident fellow on sustainable development at the Urban Land Institute. “I think what you’re seeing now is the result of pent-up demand for mixed-use, urban housing near jobs, and transit. The market pendulum is swinging from drivable suburbanism to walkable urbanism.”
AIA chief economist Kermit Baker echoed a similar sentiment when his organization’s design trends survey for the third quarter of 2008 indicated a shift in consumer preferences toward infill housing locations with access to public transit. “As home values have dropped in most markets, buyers are considering which options will have the most resale value,” he said. “Infill locations, with their convenient access to employers, retail, entertainment, and public transit options, are proving to be appealing from both a livability and an investment perspective.”
The EPA data may, in fact, underestimate the trend. First, because its focus is limited to new construction and does not include housing created through the rehabilitation or adaptive reuse of existing structures. And second, because its jurisdictional breakdowns oversimplify the distinctions between urban and suburban development. For purposes of the study, Thomas says, fringe developments on exurban farmland ended up being lumped in the same category with high-density, close-in suburbs which, for all intents and purposes, are nodal extensions of the city.
Permit data in the EPA study shows that urban redevelopment continued its upward trajectory through 2007, suggesting there was little loss in momentum, even at the start of the housing bust. “What’s also interesting is that the data stopped before the run-up in gas prices,” McMahon observes. “What we were seeing during the $4 per gallon gas era was that transportation costs were offsetting the cheaper housing prices people found by buying farther out.” Theoretically, that was probably prompting some homeowners to consider moving closer in, he says.
David Goldberg, communications director for Smart Growth America, a national coalition advocating compact growth, agrees. “I think there are deep expectations among Americans that this volatility [in fuel prices] will continue,” he says. “Combine that with an aging population and a drop in household size, and all signs point to a desire for more convenient locations with transportation options.”
“The era of McMansions is over,” McMahon says.
But not everywhere.
Although many urban cores are undeniably in renaissance mode, the EPA analysis also found 13 regions in which infill development increased significantly, but still accounts for less than a quarter of all new residential units. Twelve metro regions saw very little change at all in the distribution of residential permits.
City size, culture, zoning, air quality issues, and public transportation are among the many variables influencing development and land use patterns. Plus, there’s always the issue of funding.
“Even with solid economic fundamentals, many large scale redevelopment projects still require changes in local regulations or public infrastructure investments to be successful,” Thomas noted in the report summary. “For example, transit-oriented development often requires updates to zoning codes, more flexible parking regulations, assistance with land assembly, or improvements to upgrade water, sewer, and local streets. Brownfield properties often need assistance to evaluate contamination and potentially clean up soil and groundwater.”
The Census projects that the U.S. population will expand by 25 million people in the next decade, and that the biggest growth will occur among millennials (ages 19-30) and people over 65. “These groups are still figuring out their preferences,” Thomas says. “It will be interesting to see where they end up.”
Jenny Sullivan is senior editor, design, at BUILDER magazine.
Learn more about markets featured in this article: New York, NY, Chicago, IL, Los Angeles, CA, Milwaukee, WI, Miami, FL, Atlanta, GA, Seattle, WA, Denver, CO, San Diego, CA, Portland, OR.
